Page 6 - FSUOGM Week 10 2023

FSUOGM COMMENTARY FSUOGM

Perspectives: China wants

the Line D pipeline. Can

Central Asia deliver?

Beijing is leaning toward buying additional Central Asian gas, despite
reliability concerns.

CENTRAL ASIA CHINA is signalling that it wants to move for- because, while China is developing production
ward with a Central Asian natural gas pipeline in Xinjiang’s Tarim basin, the gas there is in
project that’s been discussed for decades. But ultra-deep reservoirs that pose technical and
does Central Asia have gas to fill the pipeline, economic challenges. Analysts are sceptical that
known as Line D? the WEP’s expansion is only to deliver domestic
The region is facing its own increasingly gas.
undeniable gas shortages, as well as competition Indeed, due to Turkmenistan’s relatively
from Russia and liquefied natural gas (LNG) competitive production costs, Beijing has con-
suppliers. So, the long-planned construction of tinued to court Ashgabat, and the two sides
Line D of the Central Asia-to-China pipeline, issued a joint statement in early January explic-
while increasingly likely, is not yet clinched. itly committing to accelerate “construction of
Line D” and to “intensify cooperation in the gas
Beijing: Making moves in natural gas mar- industry.”
kets Beijing would take some risk by accepting
China’s total natural gas consumption jumped more Central Asian natural gas, as the region
more than 1,000 percent in the first two decades has often struggled to fulfil its production obli-
of this century as it became the world’s largest gations, sparking mini-energy crises in China.
importer. It imported about 42% of its total nat- During the winter of 2017/2018, production
ural gas consumption in 2021, receiving supplies failures in Turkmenistan led to outages in China.
via LNG, Central Asia pipeline natural gas, Rus- The unreliability of Central Asian gas exports
sia and Myanmar. Flows from Turkmenistan continued over the last two winters. In January
accounted for about 75% of all import volumes 2022, Uzbekistan paused exports to China dur-
from Central Asia in the same year (China has ing Kazakhstan’s unrest; Tashkent also report-
not released volumes for 2022 imports). edly suspended exports in November 2022
That gas flowed through the Central Asia-to- amid surging domestic demand, although some
China pipeline network, which began operations accounts hold that Uzbek officials quietly main-
with Line A in 2009; Line B came online the fol- tained (politically unpopular) exports. Also
lowing year. The two have a combined capacity in November 2022, China sought assurances
of 30bn cubic metres (bcm) per year and connect that Kazakhstan would maintain gas deliveries.
to Turkmenistan’s Bagtyyarlyk gas field. Line C, Yet last week Kazakhstan vowed to end winter
with a capacity of 25 bcm/year, entered service in exports.
2014, with Turkmenistan and Uzbekistan each And in January, Turkmenistan suspended gas
providing 10 bcm and Kazakhstan contributing exports due to extremely cold weather. A week
5 bcm. later, Ashgabat undertook yet another “consti-
There are signs that Beijing plans to expand tutional” overhaul, which brought former pres-
these links. ident Gurbanguly Berdimuhamedov back in
After launching a new gas field in Turkmen- charge, demoting his son and injecting yet more
istan last summer, Beijing announced it would doubt about stability in the secretive country.
add a fourth pipeline to its domestic West-East
Pipeline (WEP) network. While PipeChina Central Asia’s (somewhat) competitor:
claimed this was to ensure domestic gas supplies Russia
from the western province of Xinjiang, it seems Fortunately for Ashgabat, its biggest competitor
instead that Beijing is seeking to accommodate in the region, Russia, is having its own troubles
more natural gas inflows along Line D. That’s supplying China. In October, Russian Deputy

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